San Miguel Corp. (SMC) and the Autonomous Region in Muslim Mindanao (ARMM) have signed a memorandum of understanding (MoU) to help develop the region through investments in industries ranging from energy to ports and bulk water facilities.
SMC President and Chief Operating Officer Ramon Ang and ARMM Gov. Mujiv Hataman struck the deal on June 8, which initially establishes an agreement for Ang’s SMC Global Power to build a power plant in ARMM to help provide long-term solutions to Mindanao’s power crisis.
Ang said ARMM represents one of the most under-penetrated markets in the Philippines, “but is a region ripe for investment offering huge potential growth.”
San Miguel’s investment in ARMM is in line with its strategy to locate facilities and production centers outside urban centers, creating strong “second-tier cities,” generating jobs, and rebalancing the national economy by income and growth dispersal, Ang.
San Miguel has committed to build a power plant over the next two years that will serve the estimated 573,446 households across the entire ARMM region. At present, only 30 percent of households in the region have electricity. Brownouts, particularly during the summer months, are frequent.
No financial or technical details of the proposed power plant were provided. As of now, rapid assessments and feasibility studies will be conducted to determine sources of power, the capacity, and viability of existing power plants in ARMM.
On a nationwide basis, SMC’s power generation company has set a goal to build P200 billion worth of power plants across the Philippines for an additional 1,200 megawatts (MW) to the grid.
‘Vote of confidence’
Instability, lack of infrastructure, and lack of a stable power supply has made investors wary, but Ang said that he hoped San Miguel’s vote of confidence in the troubled region would create much-needed jobs and entrepreneurial opportunities, and ease worries over perceived investment risks.
“San Miguel has shown great vision by choosing to invest in ARMM. Over the next few years, we’re going to see what can be achieved when the private and the public sector work together with the best interests of the local communities at heart,” Hataman said.
Hataman’s office highlighted the P37 billion in terms of infrastructure investment in ARMM during his tenure, which has provided more than 1500 kilometers of roads and other vital infrastructure like ports and water supply systems.
However, the weakness of ARMM that prevents it from building industries like rubber processing plants, seaweed processing plants, sardines factories, ice plants to prolong fish catch value, and coconut processing plants, is its shortage of power, both Ang and Hataman pointed out. Unlike roads, agriculture and fisheries, no department is tasked to resolve the power crisis in ARMM since power is private-sector led.
ARMM is comprised of Basilan, Lanao del Sur, Maguindanao, Sulu and Tawi-Tawi.